There are both benefits and drawbacks to consolidating your loans, which we’ll discuss in this article.
Choosing to consolidate your loans is an individual choice and the right decision will depend on the specifics of your loans — the types of loans, interest rates, balances, borrower benefits, and more — as well as your current financial situation.
(You can learn more about , which could lead to a lawsuit, the CFPB says.
Not paying creditors will also show up as a negative transaction on your credit report that makes it harder to borrow more money.
You may end up paying more in total interest after you consolidate your student loan debts.
You could lose some of the benefits from your subsidized student loans.
However, loan consolidation is not always the answer.When researching loan consolidation options, you may come across what’s known as debt consolidation companies.Some of these are legitimate, according to the Consumer Financial Protection Bureau, however, others are incredibly risky.Many students graduate with more than one student loan, and some graduate with as many as a dozen or more.If you currently have multiple student loans, you could benefit from a consolidation loan on your student debt.Simply put, this is the process of combining your multiple student loans into a single, bigger loan, possibly with a new lender.